Tim Hortons' lackluster quarterly performance disappointed Restaurant Brands' investors on Monday, despite the success of Burger King's Impossible Whopper and Popeyes' chicken sandwich.
Shares of the company fell 2.6% in morning trading.
Here's what Restaurant Brands reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:
- Earnings per share: 72 cents, adjusted, matching estimates
- Revenue: $1.46 billion, vs. $1.47 billion expected
Restaurant Brands reported fiscal third-quarter net income of $351 million, or 75 cents per share, up from $250 million, or 53 cents per share, a year earlier.
Excluding items, the company earned 72 cents per share, in line with analyst expectations in a Refinitiv survey.
Net sales rose 6% to $1.46 billion, narrowly missing estimates of $1.47 billion.
While Popeyes and Burger King beat expectations, Tim Hortons, which accounts for roughly 60% of Restaurant Brands' total revenue, was once again the laggard of the three chains. The Canadian coffee chain's same-store sales declined by 1.4% during the quarter. During its third quarter a year ago, Tim Hortons launched all-day breakfast across Canada.
Cold beverages, like Tims' limited-time Oreo Iced Capp, fell short during the quarter. While Starbucks' U.S. business has been helped by the increased year-round popularity of its cold drinks, Tims has to reckon with colder Canadian weather.
Tims also pulled plant-based products made with Beyond Meat's burger and sausage from all provinces, excluding British Columbia and Ontario.
Still, Restaurant Brands is confident that it can reignite Tims' domestic market through improved coffee, menu additions and digital engagement.
"We believe our position remains the strongest of any brand in any country," Cil said on the conference call.
The company has also been trying to expand Tims' reach abroad, including the United States.
Popeyes' overall same-store sales grew by 9.7% during the quarter. The chain launched a chicken sandwich nationwide for the first time in August and sold out of the product in a little more than two weeks.
"Popeyes had one of its best quarters in nearly two decades, achieving comparable sales growth of more than 10% in the U.S.," Restaurant Brands CEO Jose Cil said in a statement.
The chicken sandwich will return to stores nationwide Nov. 3.
Burger King reported its strongest quarterly same-store sales growth since 2015, thanks to its nationwide launch of the meatless Impossible Whopper in August. Cil told analysts on the conference call that the item is popular with younger customers, as well as older customers who have not visited a Burger King restaurant for a while. Other menu items, like the $1 tacos, also sold well.
